Korte Construction awarded $32.8M MACC for Navy student barracks repair in California

Contract Overview

Contract Amount: $32,841,052 ($32.8M)

Contractor: Korte Construction Company

Awarding Agency: Department of Defense

Start Date: 2024-04-25

End Date: 2026-08-18

Contract Duration: 845 days

Daily Burn Rate: $38.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: X001 DB CONSTRUCTION MACC TO TP22010M REPAIR STUDENT BEQ 1666 29

Place of Performance

Location: TWENTYNINE PALMS, SAN BERNARDINO County, CALIFORNIA, 92278

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $32.8 million to KORTE CONSTRUCTION COMPANY for work described as: X001 DB CONSTRUCTION MACC TO TP22010M REPAIR STUDENT BEQ 1666 29 Key points: 1. Contract value appears reasonable for a multi-year repair and maintenance project of this scale. 2. Full and open competition suggests a healthy market for construction services. 3. Project duration of 845 days indicates a significant scope of work. 4. Fixed-price contract type shifts performance risk to the contractor. 5. Geographic concentration in California may reflect regional construction market dynamics. 6. The award is for a delivery order under a larger MACC contract, implying ongoing needs.

Value Assessment

Rating: good

The contract value of $32.8 million for repairing student barracks is within a typical range for large-scale construction projects of this nature. Benchmarking against similar Multi-Agency Contracts (MACC) for institutional building construction in California would provide a more precise value-for-money assessment. The firm-fixed-price structure is standard for projects where scope is well-defined, indicating the government has secured a ceiling price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With 38 bids received, this suggests a robust competitive environment for this type of construction work. A high number of bidders generally leads to more competitive pricing and a greater likelihood of selecting the best value proposal.

Taxpayer Impact: The extensive competition is beneficial for taxpayers, as it likely drove down the final contract price and ensured the government received a fair market rate for the services.

Public Impact

Naval personnel stationed in California will benefit from improved living and learning environments. The project will deliver essential repairs and upgrades to student barracks, enhancing habitability and safety. The geographic impact is localized to the specific Navy installation in California where the barracks are located. The contract is expected to create or sustain jobs within the construction sector in California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen structural issues arise beyond the initial scope.
Risk of schedule delays due to weather, material availability, or labor shortages.
Ensuring compliance with all environmental and safety regulations during construction.

Positive Signals

Firm-fixed-price contract limits the government's exposure to cost increases.
Full and open competition suggests a competitive pricing environment.
Experienced contractor likely selected based on qualifications and past performance.
Delivery order under a MACC implies a pre-vetted contractor pool.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. The market for military construction and renovation is substantial, driven by the need to maintain and modernize facilities. This MACC award is likely part of a larger strategy by the Navy to efficiently procure construction services across various installations, potentially leveraging economies of scale and pre-negotiated terms.

Small Business Impact

While this contract was awarded under full and open competition and there is no explicit small business set-aside noted, the prime contractor, Korte Construction Company, may engage small businesses for subcontracting opportunities. The MACC structure itself can sometimes facilitate subcontracting by allowing prime contractors to source specialized services from smaller firms. Further analysis of subcontracting plans would be needed to assess the direct impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and facilities management departments. The firm-fixed-price nature of the award places a significant portion of the performance risk on the contractor. Transparency is generally maintained through contract award databases and reporting requirements. The specific Inspector General jurisdiction would typically be that of the Department of Defense.

Related Government Programs

Military Construction
Facilities Maintenance and Repair
Construction Services
Multi-Agency Contracts (MACC)

Risk Flags

Potential for unforeseen conditions impacting cost and schedule.
Risk of material price escalation over the contract duration.
Need for robust oversight to ensure quality and compliance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.8 million to KORTE CONSTRUCTION COMPANY. X001 DB CONSTRUCTION MACC TO TP22010M REPAIR STUDENT BEQ 1666 29

Who is the contractor on this award?

The obligated recipient is KORTE CONSTRUCTION COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $32.8 million.

What is the period of performance?

Start: 2024-04-25. End: 2026-08-18.

What is Korte Construction Company's track record with the Department of Defense and similar construction projects?

Korte Construction Company has a history of working with government agencies, including the Department of Defense, on various construction projects. Their experience often includes educational facilities, barracks, and other institutional buildings. A review of their past performance ratings, any past performance issues, and the scale and complexity of previously completed government contracts would provide a clearer picture of their capabilities and reliability for this specific MACC delivery order. Data from contract databases often includes past performance information, which is crucial for assessing contractor suitability.

How does the $32.8 million award compare to similar MACC delivery orders for barracks repair?

Comparing this $32.8 million award to similar MACC delivery orders for barracks repair requires access to a broader dataset of recent contract awards. Factors such as geographic location, specific repair scope (e.g., structural, MEP, finishes), building age, and prevailing local construction costs significantly influence pricing. However, given the scale implied by a MACC and the duration, this value appears to be within a reasonable range for a substantial renovation project. A detailed benchmark would involve analyzing the cost per square foot or cost per unit for similar projects completed within the last 1-2 years in comparable regions.

What are the primary risks associated with this firm-fixed-price contract for student barracks repair?

The primary risks associated with this firm-fixed-price contract revolve around potential scope creep and unforeseen conditions. While the fixed price aims to cap costs, if significant structural issues, hazardous materials (like asbestos or lead paint), or extensive system failures are discovered during demolition or repair that were not adequately identified in the initial assessment, change orders could increase the total contract cost. Contractor performance risk also exists; delays or quality issues could impact the project timeline and require corrective actions. Furthermore, market fluctuations in material costs or labor availability could strain the contractor's ability to meet the fixed price without compromising quality or schedule.

How effective are MACC contracts in ensuring value for money for construction services?

Multi-Agency Contracts (MACC) can be effective in ensuring value for money by streamlining the procurement process and leveraging pre-negotiated terms and conditions. By establishing a pool of pre-qualified contractors and contract vehicles, agencies can reduce the time and administrative burden associated with individual contract awards. This can lead to faster project execution and potentially better pricing due to the volume of work anticipated. However, the actual value for money depends on the initial competition for the MACC itself, the quality of the task orders issued, and ongoing oversight. Effective competition at the task order level, as seen with this delivery order, is crucial for price discovery and ensuring competitive rates.

What is the historical spending trend for student barracks repair by the Department of the Navy?

Analyzing historical spending trends for student barracks repair by the Department of the Navy would require accessing comprehensive historical contract data. This would involve looking at aggregate spending on facilities maintenance, repair, and construction specifically for barracks over several fiscal years. Trends might indicate increasing or decreasing investment in facility upkeep, potential shifts in repair strategies (e.g., from minor repairs to major renovations), and the average cost of such projects. Understanding these patterns can help contextualize the current $32.8 million award and assess whether it aligns with historical investment levels or represents a significant change in spending.

What are the implications of the 845-day duration on project management and cost control?

The 845-day duration (approximately 2.3 years) for this barracks repair project has several implications. Firstly, it suggests a substantial scope of work, potentially involving extensive renovations or repairs across multiple buildings. Long durations increase the risk of encountering unforeseen conditions, material price escalation, and potential labor market shifts. Effective project management is critical to maintain schedule adherence and control costs over this extended period. The contractor must implement robust scheduling, resource management, and risk mitigation strategies. For the government, it necessitates sustained oversight and potentially requires budgeting for inflation adjustments if the contract terms allow.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6247319R1237

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5700 OAKLAND AVE STE 275, SAINT LOUIS, MO, 63110

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,841,052

Exercised Options: $32,841,052

Current Obligation: $32,841,052

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $18,105,571

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6247321D1208

IDV Type: IDC

Timeline